Who is lying about the nano fertilizer scam? Mahindanada, PB or somebody else?

Who is lying about the nano fertilizer scam? Mahindanada, PB or somebody else?

24 October 2021 10:12 am

The transaction of importing 100,000 liters of nano nitrogen liquid fertilizer from India to Sri Lanka has caused a great deal of controversy in the country. Opposition groups have lodged allegations that the deal was corrupt, but various government officials denied the allegations. What really has happened here? Who is lying?

The bank transaction

There is a bank account of the state-owned "Lanka Fertilizer Company" at the Town Hall branch of the People's Bank. The money for the importation of fertilizer was received to this account. Recently, the Ceylon Fertilizer Company had informed the People's Bank to deposit $ 1.2 million from that account in an account called "United Farmers Trust Ltd".

It is now known that the account was suddenly opened on October 18 by Mohan Perera and GM Weerasinghe. However, when a client gives such advice on crediting their money in a bank, the bank is obligated to carry it out. Accordingly, it appears that People's Bank has not engaged in any illegal activity. 

This nano nitrogen liquid fertilizer is manufactured by IFFCO Company which is situated in the Indian state of Gujarat. The local agent for IFFCO was the United Farmers' Trust Ltd. Accordingly, the People's Bank had been instructed to pay $ 300,000 to IFFCO for the fertilizer from the money which was credited to the United Farmers' Trust Ltd's account as mentioned earlier and the amount has been paid.

The company has then informed the People's Bank that President Gotabhaya Rajapaksa was also scheduled to arrive at the airport to receive the consignment of fertilizer and since the stock of fertilizer had to be imported immediately, they were asked to transfer another $ 80,000 to Sri Lankan Rupees for airfare and other charges, including labor services.

All the incidents related to this were revealed to the country through the media and the People's Bank had taken steps to suspend the account of the United Farmers Trust Ltd. which had caused a great deal of controversy.

The issue of the transaction

The Minister of Agriculture Mahindananda Aluthgamage was responding to a recent revelation made by JVP MP Vijitha Herath regarding this transaction in Parliament.

In importing this nano nitrogen fertilizer to Sri Lanka, the proposal is submitted to the Government through the "Sri Lanka - Indian Trade and Investment Promotion" which means that this was done through the Indian Embassy. At that time an Indian government company called IFFCO had entered into this agreement with Sri Lanka - Indian Trade and Investment Promotion Board. Accordingly, a local company in Sri Lanka called United Farmers has been named as the representative of the Indian Fertilizer Corporation called IFFCO.

Accordingly, they are the ones who have submitted this proposal for this tender. The government has credited the agent named by the company and he has sent the LC and imported these fertilizers. No illegal transactions have taken place during this." He said.

Although the Minister said this, in general, when a state-owned enterprise makes such a large-scale import, its methodology is for the state-owned enterprise to pay directly to the relevant foreign parent company. The local agent nominated by the company will only do the procurement for such transactions and the commission will be paid by the relevant foreign parent company.

In this transaction, the Ceylon Fertilizer Company had to pay the Indian IFFCO and they had to pay the relevant commission to their local agent, United Farmers Trust. This commission is legal and if things went that way, there would be no illegality.

But what really happened was different than this. Ceylon Fertilizer Company has paid the full amount to United Farmers Trust, the local agent of IFFCO, and they have spent a quarter of it and brought only a portion of the required stock of fertilizer to Sri Lanka. Accordingly, a huge amount of money should remain in the account of the local agent for several days and he has requested to transfer some of it to rupees. This is an illegal and highly suspicious transaction.

On the other hand, according to Mahindananda Aluthgamage, if the fertilizer deal was to be done through United Farmers Trust, questions arise that why they do not have even opened a bank account for such a multi-million dollar transaction earlier,  and why this account had to be opened on October 18 without even handing over the National Identity Card numbers to the bank in such a hurry. Mahindananda Aluthgamage's answer to this question, including the Indian Embassy, ​​seems absurd. His role is also quite questionable given the extent of his efforts to clean up the deal.

Derana Media Network's Weekend Aruna newspaper had accused the Secretary to the President P.B. Jayasundara had influenced this deal. Jayasundera had denied the allegation and as per his notification, a police investigation had been launched within a few hours.

Although it is clear that somebody has pressured to avoid the system, we do not know whether it was Secretary to the President PB Jayasundara or the Minister of Agriculture Mahindananda Aluthgamage.

However, unconfirmed sources told that a powerful state minister and an individual named "Gajadeera" from the Matara area were behind the controversial deal.